Roundup: Finnair teams up with human resources company to face personnel challenge

The latest news that a human resources company is replacing British airline Flybe UK to be the key owner of the regional carrier Flybe Nordic is indicative of the major challenge the Finnish airline industry management has combated for years, cabin crew salaries.

Flybe UK and Finnish national carrier Finnair jointly set up Flybe Nordic in 2011, with Flybe UK holding 60 percent stake and Finnair holding the rest 40 percent. The total investment then was 25 million euros (about 29.5 million U.S. dollars).

The ambition, however, turned out to be fruitless. The new venture, which mainly operated regional routes within Finnair's larger network, kept losing money, and Flybe UK wanted to relinquish all its shares.

Finnish media reported on Wednesday that Finnair found two domestic buyers who are willing to join.

Upon approval by Finnish competition control and completion of the sale, Finnish temp agency StaffPoint will take 45 percent stake, investment company G.W. Sohlberg will hold 15 percent, and Finnair will continue to hold 40 percent. The purchase prices was 1 euro.

The news will put an end to the episode, but the headache of the high personnel cost will not end at all.

Finding cheaper cabin crews has been a daunting task faced by Finnair, a pioneer airliner linking Europe to major East Asian cities.

In recent years, Finnair has made deals with foreign human resources providers for cabin crews. The routes between Finland and Spain were the first to get an all Spanish cabin crew two years ago.

Pilots, however, have remained Finnish.

In the Asian market, Finnair and Norwegian crew management company OSM Aviation signed an agreement last year for recruiting cabin crews in Asia for the Finnair routes to Hong Kong and Singapore.

The decision was made after years of bargaining with the union of its flight attendants.

Finnair had been using a partially Asian crew with a lease agreement, but the deal with OSM was to lower the cost further. Industry sources told Xinhua the Hong Kong based cabin crews will face a cut of 150 to 200 euros per month.

On the routes between Finland and the Chinese mainland, Chinese flight attendants work embedded in Finnish crews. Leased via the mainland flight crew service company FASCO, their position will not be subject to any change.

Using non-EU labor is administratively difficult. Even though based outside the EU, the foreign crews need work permits.

Despite all the difficulties, Finnish staffing company StaffPoint Group, the new owner of the Flybe Nordic, believes it can add value to the airline sector.

The company's CEO Mika Kiljunen told Xinhua that as the airline business "is growing and it is labor intensive," they want to play a role in the future of the industry.

He said success in this sector is possible if "the operator is efficient."

StaffPoint has no history of providing personnel to Finnair.

Kiljunen said that air traffic has "a strong positive impact on the Finnish economy and supports Finnish employment".

Kiljunen was reluctant to go into more details in discussing their plans for developing Flybe Nordic. He only said the Finnish labor scene would not be an obstacle "as there are many tariff agreements."

Finnair welcomed the envisaged entry of the human resources company as a key owner of the regional airline.

"The sale will have no immediate impact on flight services," Finnair chief operating officer Ville Iho told Xinhua. Endit